New York City Fraud Defense Lawyer Explains Auto Insurance Fraud
The Attorney General of New York indicates that auto insurance fraud costs New Yorkers millions of dollars in losses every year. Anyone licensed by the state Insurance Department, including insurance agents, insurers, and brokers, is obligated by law to report suspected fraud to the Insurance Department’s Insurance Frauds Bureau. When insurance fraud is reported or suspected, a comprehensive investigation may be conducted by the insurance company as well as by law enforcement.
Fraud can result in serious criminal charges and may be considered a felony offense depending upon the type of fraud scheme, the amount of money at stake, and whether anyone sustained injury as a result of the fraud. If you are charged with auto insurance fraud, it is imperative you understand how a car insurance fraud investigation works and what your options are for responding to accusations being made against you. An experienced New York City fraud defense lawyer at Bukh Law Firm, PLLC can provide you with the legal representation you need to handle a fraud investigation or to respond if you have been indicted.
What is Auto Insurance Fraud?
Auto insurance fraud can be broadly divided into two categories:
- Soft insurance fraud refers to exaggerating damages when a legitimate accident occurs. If you were hurt in a
collision but pretend that your injuries are worse than they really are, this could be considered soft insurance fraud. - Hard insurance fraud refers to staging an accident for the purpose of making an insurance claim. No legitimate collision occurs, but there is a fraud scheme set in place to cause a crash and then make injury claims after the accident.
New York is a no fault insurance state, which means every motorist is expected to carry personal injury protection (PIP). New York adopted its no fault system in 1974 and is one of just 12 states in the U.S.
No fault insurance rules open the door to no-fault insurance fraud. Medical bills and runners team up to stage fake auto accidents, after which the medical clinics bill insurance companies for treatments that are never performed. In each “accident,” anywhere from two to four passengers may be in the vehicle and may all claim to have
How Does a Car Insurance Fraud Investigation Work?
The Insurance Information Institute reports that no-fault insurance fraud schemes may have driven up the price of auto insurance in New York by as much as $229 million. Because no-fault insurance fraud and other car insurance fraud scams are so common in New York, insurers are often aggressive in looking for signs of fraud. Unfortunately, this means people with legitimate claims can have a difficult time getting their bills covered and may even be accused of an illegal fraud activity.
Car insurers take a number of different steps in a car insurance fraud investigation. Insurance companies may review a copy of the police report; speak to witnesses; visit the crash scene; take photographs of the scene and the damaged vehicles; and contact the other driver. Insurers may also ask to speak with medical providers and may request the release of medical records.
When insurance fraud scams are suspected, state and federal law enforcement agencies may conduct their own car insurance fraud investigations. The Federal Bureau of Investigations indicates that insurance fraud involving casualty, property, and life insurance is a financial crime that falls under the jurisdiction of the FBI.
The FBI focuses its investigative resources on premium and asset diversion when insurance professionals steal premiums from policyholders; as well as on staged auto accident claims, bodily injury fraud, and property insurance fraud. These investigations involve questioning victims, questioning insurance companies, using cooperative witnesses and confidential informants, and otherwise following the money trail to try to find fraud.
What are Car Insurance Fraud Penalties?
Car insurance fraud is a serious crime. New York state addresses insurance fraud in Article 176. Under NY’s laws:
- Committing any fraudulent act to improperly obtain insurance payments is insurance fraud in the fifth degree, which is a Class A misdemeanor (176.10)
- Committing insurance fraud and wrongfully obtaining assets in excess of $1,000 is insurance fraud in the fourth degree, which is a Class E felony (176.15)
- Committing insurance fraud and wrongfully obtaining $3,000 of more in assets is insurance fraud in the third degree, which is a Class D felony (176.20).
- Committing insurance fraud and obtaining $50,000 or more of assets is insurance fraud in the second degree, which is a Class C felony (176.25).
- Committing insurance fraud and obtaining $1 million or more in assets is insurance fraud in the first degree, which is a Class B felony. (176.30)
- Committing a second act of insurance fraud within five years of a prior conviction is aggravated insurance fraud, which is a Class D felony (176.35).
There are defenses and options to try to avoid or minimize car insurance fraud penalties. Unless a prosecutor can prove you are guilty of insurance fraud, you shouldn’t be convicted. Your attorney will work hard to help introduce reasonable doubt about whether you attempted to defraud an insurance company.
How Can a Car Insurance Fraud Lawyer Help
At Bukh Law Firm, PLLC, we know that car accidents are complicated and determining the cause of the crash is difficult. We also know that many insurers are overly anxious to make allegations of fraud to avoid paying legitimate claims. We will fight hard to help our clients avoid being found guilty of an insurance fraud offense. Call today to learn how we can represent you .
